I didn't know for the longest time. As a kid, it made sense that, "obviously, what they are saying is what they're doing. Why would people lie? Thats not ok, so they wouldn't try any tricks."--a naive optimistic child.
Absolutely nobody challenged the idea of recycling being effective as I grew up. It just was. No reason to look into it.
I didn't learn about the smokescreen of recycling until my minimalist/zero-waste kick where that info naturally pops up. If I wasn't curious, would I still be confident in recycling to this day?
I think most people don't know. Assuming they do will harm any action to help.